Needing cash and technical expertise, Hindustan Petroleum (HPCL) is talking to petrochemical players in West Asia for its maiden petchem project in India.
The company recently revived plans to set up a mega 15 million tonne per annum (mtpa) integrated refinery-cum-petrochemical complex in the Vizag-Kakinada Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR). The project has been proposed in association with Gail India.
While HPCL and Gail will together hold up to 51% stake in the project, the former is interested in offloading the remaining 49% to either ?one or two experienced petchem players?.
It has held talks with Saudi Basic Industries, Saudi Arabia?s biggest chemicals, fertilisers and plastics manufacturer, and a Kuwaiti company for stakes in the project.
The company did not invite the Lakshmi Mittal-promoted Mittal Energy, which is its JV partner in the Bhatinda refinery, as Mittal does not have technical expertise.
When contacted, HPCL director (refineries) BK Namdeo confirmed that the company is looking at foreign players for equity and technical participation, but main focus will be the Barmer refinery.
HPCL is looking at players who have technical expertise and financial wherewithal for a petchem plant as it is not in a position to commit substantial capex to yet another project.
It has requested Andhra Pradesh Industrial Infrastructure to allot it a 5,000-acre plot for the project against the earlier promised 1,500-acre. Also, it expects some fiscal benefits for the project as part of the overall package to be given to AP when Telangana is created.
The PCPIR region in the Vizag-Kakinada belt is being developed by APIIC and will be spread along the coastal corridor of Vizag and Kakinada.
However, experts are not counting the proposed project in HPCL?s valuation as the PCPIR policy, released by the government of India in 2007, failed to pick.
Analysts are more upbeat on HPCL?s aggressive capacity expansion plans at the Mumbai, Vizag and Barmer refineries.
HPCL has a plan called Shikhar 42, under which it plans to produce and market 42 mtpa of petroleum products by 2016-17. HPCL has an installed capacity of 24 mtpa contributed by 7 mtpa from Mumbai, 8 mtpa from Vizag and 9 mtpa from its Bhatinda refinery. In FY13, HPCL posted total sales of 30 mtpa met, the shortfall mainly through purchases from private refiners Reliance Industries and Essar Oil.
